Benchmarking is another ingredient in an organization’s quality competence. Benchmarking involves selecting a demonstrated standard of products, services, cost, or practices that represent the very best performance for processes or activities very similar to your own. The idea is to develop a target at which to shoot and then to develop a standard or benchmarking against which to compare your performance. The steps for developing benchmarks are:
1) Determine what to benchmark;
2) Form a benchmark team;
3) Identify benchmarking partners:
4) Collect and analyze benchmarking information;
5) Take action to match or exceed the benchmark.
In the ideal situation, you find one or more similar organizations that are leaders in the particular areas you want to study. Then you compare yourself (benchmark yourself) against them. The company need not be in your industry. Indeed, to establish world-class standards, it may be best to look outside of your industry. If one industry has learned how to compete via rapid product development while yours has not, it does no good to study your industry. Benchmarks can and should be established in a variety of areas. Quality competence requires no less.